DMSO was, and still is, thought by some to be a wonder drug, especially for arthritis relief. I believe there is no scientific evidence to support this.
In the biomedical sciences, it's most commonly used in freezing cells. The cells to be frozen are put in aqueous solution (usually calf serum) with about 10% DMSO prior to freezing, usually at -80 degrees C, and then transferred to liquid nitrogen.
DMSO is also frequently used as a solvent in order to keep compounds that are not soluble in water in solution.
Interestingly, certain cell lines of myeloid lineage can be differentiated in low concentrations (~1.5%) DMSO. Presumably, this low DMSO concentration somehow mimics the action of some normal biological factor.